After an optimistic start to the year, Europe's recovery hopes were dashed by weak manufacturing data; there are fears the U.S. sequestration will undermine growth, and China is showing signs of weakness.

And the minutes from the last Federal Reserve policy setting meeting showed divisions about when the central bank may start to wind down its bond-buying program.

"When there's uncertainty, fund managers pull the trigger," George Gero, vice president of global futures at RBC Capital Markets, said of the recent decline in copper.

Investors dumped copper along with U.S. equities on Wednesday and the selling continued on Thursday leaving the red metal at $3.5530 per pound, an eight-week low.

He sees a head-and-shoulders pattern forming in the copper chart which could signal more pain to come. Copper could test the October 2011 lows around the $3.05 to $3.10 level. "There's a risk this falls out of bed," he warned.

Gartman on Markets: I'm Getting Out

Dennis Gartman, founder, editor and publisher of the Gartman Letter, tells CNBC why he thinks the psychology of the markets has changed, and changed dramatically.

Dennis Gartman, publisher of the Gartman Letter, also turned bearish on risk markets and is pulling out — at least for now. He told CNBC that the sell-off in U.S. equities Wednesday signaled a major sea change in investor psychology on fears the Fed may take the punch bowl away.

"Trend lines in everywhere in every different kind of capital market be it the dollar, be it base metals, be it precious metals, be it commodities, be it the equity markets all changed and changed dramatically," he said of the Wednesday selloff, adding "I'm getting out."

But while there's now near-term confusion in the copper market, Gero said that once some of the uncertainty lifts, copper prices could rebound particularly if demand looks strong in China after the Lunar new year.

"Copper will trade at $3.50 per pound for a while until we see what will happen with China and the recovery here in the U.S.," Gero said.

With about 40 pounds of copper used in every car, Gero said global auto sales trends will also be important in gauging where copper prices are headed.